IBM on Thursday announced that it is working with four hospitals to improve the management of patient information by revamping the hospitals’ health IT systems.

The announcements come a little more than a week after United States President Barack Obama signed an historic stimulus bill into law that contained $19 billion in grants and incentives for health IT. (Is Health Care Tech's Recession Bonanza?)

The hospitals are Capella Healthcare, Memorial Hermann Hospital System, Trillium Health Centre, and Vanderbilt University Medical Center. All have existing relationships with IBM, and all except Trillium, which is Canadian, stand to benefit from the grants.

One area of bipartisan agreement on Capitol Hill is the assertion that the country’s health care delivery system is broken and in urgent need of repair.

Former President George W. Bush had the creation of a nationwide electronic network to securely manage medical records as a centerpiece of his presidency. (IBM, Google Extend the Medical Cloud)

But the ultra-individualistic and IT tech-resistant health care industry still managed to fight off electronic reform and hang on to a system that has remained stubbornly paper-based for the most part.

But the sheer size of the incentives in the stimulus act, and the fact that receipt of stimulus money is tied to performance and adherence to national standards, gives real reform a fighting chance.

Plus there are significant consequences for hospitals that do not adhere to the conditions that accompany the grants.

“There are carrots and a proverbial stick on the back end with the changes in Medicare payout schedules starting in 2015,” Dan Pelino, general manager of IBM's Healthcare & Life Sciences Industry unit.  

Hospitals that don’t live up to the guidelines and goals of the stimulus grants will see their Medicare payments reduced on a progressive scale starting in 2015. (Google Admits Health Data Plan)

For tech companies such as IBM, Microsoft, Google, Accenture, and Hewlett-Packard the stimulus is unquestionably a much-needed opportunity in the throes of a numbing recession.

“The tech players that have overarching health IT practices are poised to take advantage of this opportunity,” said John Slye, principal analyst at INPUT. “This is an extremely attractive revenue target in a down market.”

And while IT firms such as IBM and systems integrators such as Accenture stand to benefit, there is room for small startups.

“There are so many moving parts to this that there will be extensive opportunities for smaller subcontractors, but they are going to have to bring unique technologies that get the attention of the big guys,” Mr. Slye said.